Southampton Ventures Inc.
TSX VENTURE : SV

Southampton Ventures Inc.
Quetzal Energy Inc.

Quetzal Energy Inc.

April 17, 2009 10:01 ET

Southampton Ventures Inc. and Quetzal Energy Inc. Announce Closing of Business Combination and $4,000,000 Subscription Receipt Offering

TORONTO, ONTARIO--(Marketwire - April 17, 2009) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWSWIRE SERVICES

Southampton Ventures Inc. ("Southampton") (TSX VENTURE:SV) and Quetzal Energy Inc. ("Quetzal") are pleased to announce that they have completed their previously announced business combination as initially announced on January 12, 2009.

Prior to the closing of the transaction, Southampton filed articles of amendment to consolidate all of its then issued and outstanding common shares on the basis of one new share for each two existing shares. Following the share consolidation, articles of amalgamation were then filed effecting the amalgamation of Quetzal with 2199445 Ontario Inc., a wholly-owned subsidiary of Southampton, and all existing shareholders of Quetzal received common shares of Southampton in exchange for their shares of Quetzal, on a 1:1 basis. In connection with the transaction, all convertible securities of Quetzal were also exchanged for equivalent securities of Southampton which will hereafter entitle the holders to acquire securities of Southampton in lieu of securities of Quetzal based on the same terms and subject to the same conditions as the former convertible securities of Quetzal. Southampton has also changed its name in connection with the transaction to "Quetzal Energy Ltd." It is anticipated that the common shares of Southampton will commence trading on the TSX Venture Exchange under the new symbol "QEI" on or about April 21, 2009, after giving effect to the business combination, consolidation and name change.

Also in connection with the transaction, Quetzal effected a fully subscribed offering of subscription receipts (the "Subscription Receipts") further to its previously announced non-brokered private placement, at a price of $0.125 per Subscription Receipt. Each Subscription Receipt was automatically convertible upon completion of the transaction with Southampton into one unit of Quetzal (a "Unit") consisting of one common share of Quetzal and one share purchase warrant (a "Warrant"). These common shares and Warrants of Quetzal comprising the Units, and all common shares of Quetzal underlying such Warrants, were then subsequently automatically exchanged for or converted into a corresponding security of Southampton in connection with the business combination. Pursuant to this placement, Quetzal issued an aggregate of 32,000,000 Subscription Receipts, or the underlying Units directly, at a price of $0.125 per Subscription Receipt or Unit, to raise aggregate gross proceeds of $4,000,000. Each Warrant entitles the holder to acquire one additional common share at an exercise price of $0.20 until April 21, 2009, provided that if the closing price of the common shares of Southampton on a stock exchange in Canada is higher than $0.60 per common share for a period of 20 consecutive trading days at any time prior to such expiry date, the expiry date of the Warrants may be accelerated by giving notice to the holders thereof and in such case the Warrants will expire on the 30th day after the date on which such notice is provided. Eligible registrants received a cash commission equal to 8% of the gross proceeds they raised in the offering as well as broker warrants (the "Broker Warrants") entitling them to acquire such number of Units as is equal to 10% of the aggregate number of Subscription Receipts they sold in the financing, at a price of $0.125 per Unit for a period of three years.

PowerOne Capital Markets Limited ("PowerOne") was retained to act as an advisor in connection with the transaction, in connection with which PowerOne has received an advisory fee payable in shares consisting of such number of common shares of Southampton (on a post-consolidation basis) as is equal to 3% of the total number of common shares of Quetzal issued and outstanding immediately prior to the closing of the transaction (the "Advisory Fee").

Immediately following the closing of the business combination, an aggregate of 83,844,120 common shares of Southampton are issued and outstanding, of which 32,913,729 common shares are held by former Quetzal shareholders, 18,930,391 common shares are held by existing Southampton shareholders, 32,000,000 common shares are held by purchasers of the Subscription Receipts, and 987,411 common shares have been issued to PowerOne in satisfaction of the Advisory Fee. Furthermore, based upon the number of convertible securities of each of Southampton and Quetzal currently outstanding, a further 40,907,500 common shares of Southampton are currently reserved for issuance pursuant to outstanding convertible securities. Based on the current shareholdings and present knowledge of each of Quetzal and Southampton, no person or company beneficially owns, directly or indirectly, or controls or directs more than 10% of the issued and outstanding common shares of Southampton following completion of the business combination.

Following the closing of the business combination, two nominees of Quetzal joined the five person board of directors of Southampton in place of two existing board members, such that the reconstituted board of directors currently consists of Richard Patricio, Paul Gorman and Kevin O'Connor (representing the existing Southampton board of directors), and Steven J. Reynolds and Steven Austin (representing the former Quetzal board of directors). In addition, Steven J. Reynolds, the Chief Executive Officer of Quetzal, has been appointed as Chief Executive Officer of Southampton and Michael Realini, the President of Quetzal, has been appointed as the President of Southampton. Mr. Reynolds has extensive experience in the oil and gas industry, having previously served in various capacities for 25 years with Phillips Petroleum Company, including as North American Exploitation Manager and Manager of Engineering and Development, in connection with which he managed hydrocarbon exploitation activities as well as reserve forecasting, engineering and development of new projects and ongoing reservoir engineering studies. Mr. Realini brings both oil and gas experience as well as extensive mining experience to Southampton, having previously served as President of Petro Latina Bahamas (formerly Mexpetrol Guatemala Corp.), as well as Technical Manager of El Condor Resources (Pentagon Minerals Division) in connection with which role Mr. Realini was responsible for the development of over 1,000,000 ounces of gold and silver equivalent on the El Pato gold property. In his role as Technical Manager for El Condor Resources, Mr. Realini was also responsible for the identification and acquisition of over 16 exploration contracts for properties comprising over 300 square kilometers in the aggregate which were prospective for gold, iron, magnesium, and titanium as well as non-metallic's including coal, barite, and atapulgite. Mr. Steven Austin has over 25 years of experience in connection with the management of public and private corporations, having previously served as an officer of a number of both mineral exploration and petroleum corporations including as Chief Financial Officer of Choice Resources Corp., Westchester Resources Inc. (now White Pine Resources Inc.), and Caspian Energy Inc., and as Chairman of the Board of Blue Grouse Seismic Solutions Ltd. Mr. Austin is a designated Chartered Accountant and currently serves as the Chief Financial Officer of Sprott Resources Corporation. For further biographical details relating to Messrs. Patricio, Gorman and O'Connor, please refer to publicly available information under Southampton's SEDAR profile at www.sedar.com. This board and management composition has been structured so as to retain existing management to continue to manage Southampton's mineral resource assets, while integrating the expertise of Quetzal's executives to manage the combined company's oil and gas assets as well as add valuable mining experience to the Southampton team.

For further details respecting the operations of each of Quetzal and Southampton, please refer to the public filings available under the respective profiles of such companies on SEDAR at www.sedar.com.

Forward-Looking Statements

Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Southampton and Quetzal, including, but not limited to, the impact of general economic conditions, industry conditions, dependence upon regulatory and shareholder approvals, the execution of definitive documentation and the uncertainty of obtaining additional financing. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

Contact Information

  • Quetzal Energy Ltd. (formerly Southampton Ventures Inc.)
    Wayne Fraser
    Chief Financial Officer
    (416) 362-9096
    Email: wayne@quetzalenergy.com
    or
    Quetzal Energy Ltd. (formerly Southampton Ventures Inc.)
    Richard Patricio
    Director
    (416) 941-1071
    Email: patricio@pinetreecapital.com